Sony on Tuesday unveiled a slimmer PlayStation 3 game machine and cut the price of its existing PS3 video game consoles in a bid to revive sales of its flagship system.

The new 120-gigabyte PlayStation 3 Slim will sell for $299 starting the week of Sept. 1 and will become the standard-bearer for the PlayStation lineup. It will replace the 80-GB and 160-GB PlayStation 3 models, both of which are getting an immediate $100 price cut to $299 and $399, respectively.

"When you get to $299 and combine the PS3's state-of-the- art gaming, free online, hard drive and Blu-ray player, we think it's a game-changing move that will fuel tremendous momentum for us," said Peter Dille, senior vice president for marketing at Sony Computer Entertainment America.

The PS3 Slim will be 32 percent lighter, 36 percent smaller and will use 34 percent less power. The tighter configuration also will bring down production costs, Dille said.

The moves, long anticipated, put Sony in a much more aggressive stance for the holiday season and allow the company to compete better with rivals Nintendo and Microsoft, which have consoles that sell for less than $300.

The PlayStation 3 has struggled against the $250 Nintendo Wii and the Microsoft Xbox 360, which sells for $200, for the cheapest model. Last month, Sony sold just 121,000 PS3s in the United States, about half the number of consoles sold by its rivals.

Sony, the clear leader in the previous-generation hardware competition, has sold 23.7 million PS3s while Microsoft has moved more than 30 million Xbox 360 units and Nintendo has sold 52 million Wiis.

"Sony should get a nice boost, not only because of the price cut, but also the introduction of the Slim should stimulate some incremental demand," he said. "With the Xbox 360 price also expected to be cut before the holidays, it remains unclear how much of a market share boost the PS3 will actually achieve."

Sony also announced an update for the PlayStation 3 that will feature better navigation and a "What's New" screen. And the PlayStation Portable Go, set for release Oct. 1, will have cheaper downloadable minigames and the ability to download hundreds of comics on a digital reader.